Tuesday, August 24, 2010

Firm Charged by SEC Appointed New President 2 Weeks Before $19 Million Stimulus Award 08/24/2010 San Francisco - TierOne Converged Networks, Inc., the Dallas wireless firm charged by the U.S. Securities and Exchange Commission (SEC) with securities violations in April, appointed a new company president on August 2, 15 days before being awarded $19 million in broadband stimulus funds by the U.S. Department of Agriculture (USDA).  

In a press release issued on Friday, August 20, TierOne announced that Minnesota investor Glen Harstad was appointed the new President of the firm, a Wireless Internet Service Provider (WISP) headquartered in Dallas and incorporated in Nevada.  The company statement says the firm "named Glen Harstad to replace Kevin Weaver in the role of President effective August 2, 2010.  Mr. Harstad also joined the board of directors and committed additional capital to support TierOne's aggressive growth strategy."  

A day previous to the company announcement, on August 19, we reported that TierOne had been charged in April with violations of federal securities law, and that state securities regulators in Colorado and Texas had issued cease and desist orders against the firm in 2009 and 2008, respectively.  The 3 regulatory agencies focused their allegations, charges, and orders on the alleged activities of Mr. Weaver, identified by the SEC as the firm's CEO, and on Mr. Ronald Celmer, identified by the federal Commission as CFO. 

Two days previous to our story on the SEC action, the firm had been awarded $19.224 million in broadband stimulus funds by the Rural Utilities Service (RUS) of the U.S. Department of Agriculture.  The the RUS grant - loan package issued to TierOne was 1 of a total of 94 awards  announced on August 17 by Vice President Joe Biden.   

As of the publication of this story, the online information filed with the Nevada Secretary of State by the company does not reflect the appointment of Mr. Harstad as President, nor that he "also joined the board of directors" as reported in the company's release of last week.  In the online data from the Nevada agency, Mr. Weaver is still listed as company President as of this posting.  We have not determined the potential or typical lag times, if any, between the date of  information filing with the State of Nevada and its appearance online, nor the legal requirements for the disclosure new corporate directors or officers.  

Two telephone calls and an email of Monday, August 23, to Mr. Weaver were not answered or returned, as we sought to clarify both the time sequence of the appointment of Mr. Harstad in relation to the RUS vetting process of TierOne's funding application, and the information available online from the State of Nevada.  We did briefly speak with Mr. Celmer who told us that although he was not authorized to speak on behalf of the firm, that "Mr. Weaver remains with the company," and that a "PR firm" recently retained by the service provider would speak with us as quickly as possible.

TierOne Networks Appoints Glen Harstad as President -

Monday, August 23, 2010

First Broadband Stimulus Project Breaks Ground in South Dakota

SDN is First Broadband Stimulus Project to Put Shovels in the Ground 08/23/2010 San Francisco - The South Dakota Network (SDN) today became the first project awarded federal broadband stimulus funds to actually launch construction and installation operations during a ground breaking ceremony in Rapid City.   

Keynoting the ceremony was South Dakota Governor Mike Rounds (R-SD) who broke ground in a media opportunity attended by member companies of South Dakota Network Communications, a cooperative of 17 in-state independent telephone operating companies.

At the SDN Communications ground breaking event, left to right: Max Fainberg, NTIA
Program Manager; Gov. Mike Rounds; Bryan Roth, SDN Communications Board President;
Dr. Scott Eccarius, Rapid City Regional Hospital; Mark Shlanta, SDN Communications CEO.
SDN was 1 of 18 projects to be awarded federal broadband stimulus funds in the first group of award announcements made on December 17, 2009 by Vice President Joe Biden at a media event in Georgia.  The SDN project received a $20.6 million grant from the National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce under the Broadband Technology Opportunities Program (BTOP) of the agency.

SNL Kagan: U.S. Multichannel Market Has Decline for First Time in History

Cable Leads the Quarterly Decline, DBS and Telco Video Up 08/23/2010 San Francisco - New market analysis from research bellweather SNL Kagan announced today points to high unemployment and the crash of the housing market as leading factors which made 2Q 2010 the first quarter in history in which the U.S. multichannel video market was in decline.

Copyright 2010 SNL Kagan
The firm states "the U.S. multichannel market delivered its worst performance on record in the second quarter, losing 216,000 customers compared to a 378,000 gain in the same period last year."

Data from the firm demonstrates that the aggregate subscriber numbers for cable, direct broadcast satellite (DBS) and telco video saw a drop to 100.1 million in 2Q, with cable leading the sector to its net loss.  While "DBS and telco managed to add 81,000 and 414,000 subscribers respectively," according to the findings "cable suffered its worst quarterly video loss to date, plunging by 711,000 subscribers."  Within that large loss by cable operators, analysis reveals "six of the eight MSOs reporting their worst quarterly video losses as well."

SNL Kagan Analyst Mariam Rondeli summed up the report saying, "Although it is tempting to point to over-the-top video as a potential culprit, we believe economic factors such as low housing formation and a high unemployment rate contributed to subscriber declines in the second quarter."

The data announced today is part of the SNL Kagan Unlimited Information Service.

Thursday, August 19, 2010

Feds Award $19 Million in Broadband Funds to Texas Firm Charged with Stock Fraud 08/19/2010 San Francisco – The U.S. Department of Agriculture yesterday awarded $19 million in broadband stimulus funds to a Texas wireless firm that has been charged with multiple securities violations in 3 jurisdictions over the past 3 years.
In the most recent case the U.S. Securities and Exchange Commission charged the firm, TierOne Converged Networks, Inc., in US District Court in Dallas with violations of federal securities law.  State securities regulators in Colorado and Texas issued cease and desist orders against the company in 2009 and 2008.

The SEC filed charges against TierOne alleged “material misrepresentation” in the raising of “almost $9.5 million from approximately 200 investors in 34 states through a continuous unregistered offering of securities.”   The initial SEC complaint was filed on April 27 against the firm, a wireless Internet service provider (WISP).  In a settled complaint action, filed with the court 3 days later, TierOne agreed to stop the practices alleged by the agency, without admitting to or denying the veracity of the charges. 

According to a story in the Dallas Morning News by reporter Eric Torbenson, CEO Kevin Weaver declined to comment at the time of the SEC action.

In May 2008 the Texas State Securities Board issued an Emergency Cease and Desist Order against TierOne alleging the company “was intentionally failing to disclose material facts” relating to past claims and fines against Mr. Weaver filed by the Financial Industry Regulatory Authority (FINRA).  In 2004 FINA filed $412,000 in claims against Weaver, barred him from associating with any FINRA member firm, and ordered him to pay $547,000 in restitution to 23 investors.

In February 2009 Colorado State Securities Commissioner Fred J. Joseph issued a Consent Cease and Desist Order against Tier One ordering the company to not sell unregistered securities in the state.

The award of $19,224,200 was 1 of 94 federal grants and loans totaling $1.8 billion announced yesterday by the Obama Administration as part of the $7.2 billion broadband stimulus program of the federal Recovery Act.  The official announcement of almost $2 billion in awards was issued by the White House in a statement quoting Vice President Joseph R. Biden.  Details of the overall announcement were reviewed during a media teleconference hosted by Biden’s chief economist, Jared Bernstein, Agriculture Secretary Tom Vilsack, and Commerce Secretary Gary Locke.  The award of funds to TierOne was made by the Rural Utilities Service (RUS), a division of the U.S. Department of Agriculture (USDA).

In the summary of the firm’s application provided in the White House documentation of the 94 awards, the statement is made that the award “will allow offer broadband service speeds of up to 6.5 megabytes per second in 11 north Texas counties.”  The summary goes on to say “Approximately 246,344 people stand to benefit, as do roughly 12,726 businesses and 874 community institutions.”  Additionally, RUS apparently accepted TierOne’s estimate that the project will create “more than 1,00 jobs.”

Many observers have faulted the Obama Administration for how long it has taken to move grant and loan monies under the broadband stimulus program out to deserving service providers, rural cooperatives, nonprofits and government agencies.  Managers at RUS and at its sister agency managing the program, the National Telecommunications and Information Administration (NTIA) of Commerce, have repeatedly said how diligently they must work to review the thousands of applications submitted in 2 funding rounds of the effort.

Several reports by the Government Accountability Office (GAO) of Congress and one by the Office of Inspector General at Commerce have questioned the ability of the agencies to manage the program as they attempt to both meet a pressing spending deadline and to put needed audit and control mechanisms in place. Under the provisions of the Recovery Act, Congress has mandated that the entire $7.2 billion must be obligated by September 30.

Yesterday’s award of $19 million to a firm charged with security violations in multiple jurisdictions over the past several years will heighten the concern that federal program managers still have not found the correct balance between timeliness and prudent review of applicants.

We are publishing this story at 7:45 am (EDT), and will ask for responses to our reporting from USDA, TierOne management, the SEC, and state securities regulators. 

SEC v TierOne Converged Networks - Complaint - 04-27-2010

Wednesday, August 18, 2010

Gov. Bev Perdue Applauds $115 Million in North Carolina Broadband Stimulus Awards

Office of Governor Perdue via 08/18/2010 San Francisco - Gov. Bev Perdue today  announced that North Carolina has received $115 million in five federal recovery grants to extend broadband connectivity in North Carolina. These funds will create jobs and help spur economic development through expanded access to high-speed Internet in underserved areas.  Through two rounds of recovery funding, North Carolina has received over $255 million for broadband.

The grants are part of the second round of Recovery Act funding for broadband projects from the U.S. Departments of Commerce and Agriculture.  North Carolina has already received over $140 million in recovery broadband grants.  Gov. Perdue joined North Carolina’s congressional delegation in personally advocating for North Carolina’s grant applications in Washington, D.C., during the past year.

More information about the recently announced North Carolina broadband grants:

MCNC – $75,757,289      
This approximately $75.8 million award will allow MCNC to offer affordable middle-mile broadband service in 69 of the most economically disadvantaged rural counties along the northern and southern borders of North Carolina. The project plans to directly connect 170 community institutions to broadband. As many as 5.1 million stand to benefit as do 160,000 businesses.

With the strong support of Gov. Perdue and other state and local leaders, the Golden LEAF Foundation provided a $24 million grant in April to provide the necessary match for this federal award.

Yadkin Valley Telephone Membership Corporation – $21,668,232  
This approximately $21 million award, will allow Yadkin Valley Telephone Membership Corporation to offer a diverse Fiber-To-The-Home (FTTH) network to areas of six counties in the Piedmont area of western North Carolina. Approximately 12,803 people stand to benefit, as do roughly 606 businesses and 56 community institutions.

City of Charlotte – $16,702,490  
This approximately $16.7 million award will allow public safety entities in the city to deploy an interoperable wireless public safety broadband network in the Charlotte/Mecklenburg County area.  The project plans to construct 24 new wireless towers to complement six existing towers on the network, and bring over 11,000 public safety end users onto the system. As many as 890,000 people stand to benefit from this project.

Olive Hill Community Economic Development – $448,742      
This nearly $450,000 award will allow the Olive Hill Community Economic Development Corporation to expand access to broadband in the greater western region of North Carolina by establishing a public computer center and providing community training and support, with a focus on helping disadvantaged local businesses, the unemployed, and individuals seeking higher education opportunities.

WinstonNet Inc. – $926,537
This approximately $926,000 award, with $696,000 in matching contributions, will allow WinstonNet to improve broadband access for communities with the greatest need in Forsyth County, North Carolina. The project plans to upgrade public computers workstations and provide new equipment for 38 public computer centers.

Overall, the federal Recovery Act was to invest $7.2 billion in expanding broadband access nationwide – $4.7 billion through the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) and $2.5 billion funded through the U.S. Department of Agriculture’s Rural Utilities Service (RUS).

Muni Net Icon UTOPIA Wins $16 Million in Broadband Stimulus Funds 08/18/2010 San Francisco - The Utah Telecommunication Open Infrastructure Agency  (UTOPIA), the often star-crossed high capacity open access network owned by 16 cities in the Salt Lake City metro market, was today awarded $16.229 million in broadband stimulus funds by the U.S. Department of Commerce.

“The White House has joined national broadband leaders in recognizing the importance of UTOPIA’s model in providing fiber to communities,” said UTOPIA Board Chair Kane Loader, City Manager of Midvale in a press release of earlier today. “This award is another big step in the series of successes UTOPIA, and its management team, have had in recent years. And it’s a bright indication of many more to come. Government built open fiber, with private sector service providers utilizing the network, is the telecom infrastructure of the future,” he said.

“Our grant application was strong because we’ve proven the need for the UTOPIA network through the innovative, sustainable model we completed in Brigham City,” says Todd Marriott, UTOPIA’s Executive Director. “This grant will accelerate our ability to expand the network and leverage the cities’ continued investment in the network; it proves the financing we’re seeking is more crucial than ever. But, just as importantly, this grant ensures that the UTOPIA network continues to expand economic development, education, public safety, telemedicine and other opportunities for these cities.”

The grant, issued under the Comprehensive Community Infrastructure (CCI) program of Commerce's National Telecommunications and Information Administration (NTIA) is targeted to connect upwards of 400 community anchor institutions in parts of Perry, Payson, Midvale, Murray, Centerville, Layton, Orem, and West Valley City.

“This grant will help us bring the fastest Internet in the country to more West Valley City homes and businesses sooner,” said Mike Winder, mayor of the largest UTOPIA city.  “I personally talked with several state officials about this project, as well as Vice President Biden and White House staff, and appreciate the support we received from the Governor’s Office of Economic Development on our application for federal funds and the trust the federal government has bestowed in West Valley City and the other cities of UTOPIA,” he said.

As we first reported last November, Utah Governor Governor Gary Hebert (R-UT) recommended  to NTIA that the broadband stimulus Round 1 application of Utopia be funded.

“This grant means that UTOPIA is finally coming into Perry city,” says Perry Mayor Jerry Nelson. “That’s a reality that has us very excited.”

Gov. Nixon Announces $85 Million in Broadband Stimulus for Missouri

Gov. Nixon Announces $85 Million Investment to Bring Broadband to Homes, Businesses, Institutions across Northern Missouri

Office of Governor Nixon Press Release via 08/18/2010 San Francisco - Two partners working with the State of Missouri to expand the availability of broadband Internet will invest $85 million to connect 660,000 homes and businesses across northern Missouri, Gov. Jay Nixon announced today. This investment includes $66.3 million in competitive funding awarded under the federal Recovery Act.

Gov. Jay Nixon (D-MO) with President Obama
in July in Kansas City, MO.
(AP Photo)
"As I have said from my first day in office, the State of Missouri was going to make broadband a top priority," Gov. Nixon said. "Working hand in hand with our partners, we are competing for every dollar to transform communities across Missouri."

BlueBird Media will use its grant of $45,145,250 from the U.S. Commerce Department's National Telecommunications and Information Administration (NTIA) to construct an ultra-high capacity middle-mile network that will make broadband affordable and accessible to approximately 600,000 households and 57,000 businesses. BlueBird's service area covers 59 counties in the northern half of Missouri and the city of St. Louis. The company will provide a cash match of $9.1 million to the federal grant, and the State of Missouri will provide an in-kind, non-monetary match of $10.5 million that includes use of right-of-ways on state roadways, for a total project cost of approximately $65 million.

United Electric Cooperative received a grant of $14,849,173 and a loan of $6,363,933 (for a total project cost of $21,213,106) from the U.S. Department of Agriculture's Rural Utilities Service (RUS) to build a last-mile network to bring broadband to more than 4,200 households and businesses in six counties in northwest Missouri.

BlueBird Media and United Electric Cooperative are part of a public/private partnership called MoBroadbandNow, an initiative created by Gov. Nixon last year to dramatically expand the reach of broadband across Missouri.

With today's announcement, the Governor's initiative has successfully obtained $134.5 million in federal funds in 2010 for both middle-mile and last-mile broadband projects, with additional applications pending.

BlueBird will construct 809 miles of new fiber and 44 new microwave towers. That ultra high-capacity network, stretching across north Missouri, will be the backbone infrastructure for last-mile providers to deliver broadband to homes, businesses, schools, libraries, hospitals, public safety agencies and other facilities. United will build a 1,370-mile advanced, fiber-to-the-home network that will bring broadband directly to homes, businesses and institutions.

High-speed broadband has not reached many parts of Missouri because of the cost of building middle-mile and last-mile networks. Gov. Nixon said the expansion of broadband through the Recovery Act awards would enable Missouri businesses to be more competitive, Missouri physicians and hospitals to better serve patients, Missouri schools to provide a fuller education to students, and Missouri consumers to more efficiently utilize the benefits of the Internet.

"Just as the railroads and interstates transformed Missouri communities in decades past, these projects will help connect much of northern Missouri with the information superhighway of the future," Gov. Nixon said. "They have the potential to connect doctors and patients at the speed of light; open the doors of our colleges and universities to more students; and expand markets for small businesses to not only the rest of the state, but to markets across the globe."

A key part of the broadband proposals is that they would provide high-speed connections to what are called community anchor institutions, including schools, colleges, hospitals, libraries and public safety agencies. BlueBird's proposal includes as many as 350 community anchor points, including 213 public schools, 60 public safety entities, 10 community colleges, 30 health care facilities, and 28 government facilities. The United project will provide high-speed connections to 150 community anchor institutions, including 33 schools, 38 health care facilities, 31 public safety entities, five libraries, and three correctional institutions.

Notably, both projects will enable health care institutions to initiate regional health information exchanges and expand telemedicine capabilities, including advanced medical imaging and medical collaboration in rural areas.

The Governor said other applications that expanded broadband will provide to communities across northern Missouri include greater capacity for e-commerce, which will benefit businesses and consumers; increased opportunities for long-distance learning for students at colleges and universities, as well as in grades K-12; and better public safety, through enhanced communications to and from police and sheriffs' departments, emergency services and correctional institutions.

"This public-private partnership will create jobs and extend economic opportunity to rural areas," Otto Maly, a partner in BlueBird Media, said. "We will now be able to offer a broadband network throughout northern Missouri, including several areas where there is little or no infrastructure. The State of Missouri has joined with the federal government and private companies to ensure all Missourians have access to an affordable and high capacity internet service. We're proud to be a part of it."

The BlueBird project is expected to create 706 jobs for a two-year period during construction, with another 40 ongoing jobs after the network is implemented. The United project is expected to create 113 jobs.

On Aug. 4, three other MoBroadbandNow partners received awards totaling $49.1 million for last-mile projects. The BlueBird middle-mile project will provide service to one of those partners, Socket Telecom, which received $23.7 million to build its network in Callaway County and parts of Boone County. Big River Telephone, another successful applicant, received $24.4 million to create a network reaching homes and businesses in seven southeast Missouri counties. The other partner, Finally Broadband, received $1 million to help expand broadband in south central Missouri.

In the first round of grants announced by the federal government in January, Ralls County Electric Cooperative, a MoBroadbandNow partner based in New London, received a $19.1 million competitive award to expand broadband Internet to residential and commercial customers in northeast Missouri.Additional broadband awards are expected to be announced by the end of September.

Gov. Nixon has taken a number of steps to underscore the scope and potential of the MoBroadbandNow applications, including personal conversations with U.S. Agriculture Secretary Tom Vilsack and U.S. Commerce Secretary Gary Locke.

A top priority of the administration, the MoBroadbandNow initiative was created by the Governor to coordinate the state's efforts to expand broadband in Missouri in response to the federal recovery act passed last year. Its primary goal was to dramatically expand the reach of high-speed Internet throughout Missouri with a focus of ensuring that the state of Missouri competed aggressively for every broadband dollar included in the federal recovery legislation.

There are 59 counties that will be served by the BlueBird project, including Adair, Andrew, Atchison, Audrain, Boone, Buchanan, Caldwell, Callaway, Carroll, Cass, Chariton, Clark, Clay, Clinton, Cole, Cooper, Daviess, DeKalb, Franklin, Gasconade, Gentry, Grundy, Harrison, Holt, Howard, Jackson, Jefferson, Johnson, Knox, Lafayette, Lewis, Lincoln, Linn, Livingston, Macon, Marion, Mercer, Moniteau, Monroe, Montgomery, Morgan, Nodaway, Osage, Pettis, Pike, Platte, Putnam, Ralls, Randolph, Ray, Saline, Schuyler, Scotland, Shelby, St. Charles, St. Louis, Sullivan, Warren and Worth. The City of St. Louis also is in the BlueBird service area.

The six counties served by the United project include Andrew, Buchanan, Clinton, DeKalb, Gentry and Nodaway.

Ohio's OneCommunity Receives $44.8 Million Broadband Stimulus Grant 08/18/2010 San Francisco - OneCommunity, the nonprofit corporation addressing the digital divide in Northeast Ohio, today was awarded a $44.8 million stimulus grant from the federal broadband stimulus program.

The National Telecommunications and Information Administration (NTIA) will fund 64% of a nearly $70 million optical fiber project as part of its middle mile Comprehensive Community Infrastructure (CCI) program.  According to a press release from OneCommunity, the project "will add nearly 1,000 miles of fiber-optic cable to OneCommunity’s high-speed broadband network, enlarging its total footprint to 27 counties, and creating nearly 500 jobs."

The corporation estimates that a full "800 institutions will become subscribers as segments of the network become active over a 30-month period beginning in 2011. These anchors – many of which do not have access or cannot afford these services today – will be able to deliver enhanced education, health care and citizen services to millions of residents." 

Cooperating groups and partners in the effort driven by OneCommunity include Lorain County Community College, Medina County Port Authority, and the Ohio Academic Resources Network (OARnet).  OARNet is state research and educational network (REN) of the state.  The partners each will contribute resources for the fiber network build.  The organization now estimates a project schedule "with construction beginning the first quarter of 2011, and completion expected in segments through summer 2013." 

The application announced for funding today is 1 of 3 associated "integrated proposals totaling $141 million in requested federal funds submitted under the umbrella of the Ohio Middle Mile Consortium (OMMC)." 

In addition to OneCommunity, OMMC includes investor owned Horizon Telcom, and Com Net, OARnet, and operating state agencies.

Biden Announces Broadband Stimulus Awards

Vice President Biden Announces Recovery Act Investments in Broadband Projects to Bring Jobs, Economic Opportunity to Communities Nationwide

White House Press Release via 08/18/2010 San Francisco -  Vice President Biden today announced 94 Recovery Act investments in broadband projects that will create jobs and expand economic opportunities within 37 states.  These investments in high-speed Internet infrastructure will help bridge the technological divide in communities that are being left in the 20th century economy and support improvements in education, healthcare, and public safety.  Today’s announcement, an investment totaling $1.8 billion, is part of a nearly $7 billion Recovery Act initiative. 

Vice President Joseph R. Biden talks with workers at Impulse Manufacturing
in Dawsonville, GA, following his announcement of the first group of broadband
stimulus awards on December 17, 2009. (White House Photo, David Lienemann)
“Today's investment in broadband technology will create jobs across the country and expand opportunities for millions of Americans and American companies. In addition to bringing 21st century infrastructure to underserved communities and rural areas, these investments will begin to harness the power of broadband to improve education, health care, and public safety,” said Vice President Biden. “The awards are another great example of how the Recovery Act is creating jobs upfront, while also building a foundation for sustainable job creation and global competitiveness.”

The projects receiving funds today are part of a program – administered by the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the Department of Agriculture’s Rural Utilities Service (RUS) – to expand broadband access and adoption across the country. 

“The broadband investments announced today are going to put people to work in the near term, but they also will lay the groundwork for sustainable economic growth down the road,” U.S. Commerce Secretary Gary Locke said. “These projects will connect Americans who have for too long been without the full economic, educational and social benefits of high-speed Internet access – access central to success in the 21st Century.”

“The broadband projects announced today will give rural Americans access to the tools they need to attract new businesses, jobs, health care and educational opportunities,” Secretary of Agriculture Vilsack said. “The Obama Administration understands that bringing broadband to rural America provides a gateway for businesses and key anchor institutions – such as libraries, schools, public safety and community centers – to provide services to thousands of Americans. These projects will create jobs building these networks, and the completed systems will provide a platform for rural economic growth for years to come.”

Today’s announcement includes 66 grants awarded by the Commerce Department for projects to deploy broadband infrastructure and connect community anchor institutions to broadband, create and upgrade public computer centers, and encourage the sustainable adoption of broadband service.  It also includes 28 awards from USDA for broadband infrastructure and satellite projects that will provide rural residents in 16 states and Native American tribal areas access to improved service.
The Department of Commerce awards also contain grants for public safety broadband networks that will improve response times and communication at the scene of emergencies.   These projects constitute a critical set of demonstration projects and a head start on President Obama’s commitment to support the development of a nationwide, interoperable public safety wireless broadband network.    A description of these public safety awards can be viewed here.

According to an analysis released by the National Economic Council last year, overall Recovery Act investments in broadband are expected to create tens of thousands of jobs in the near term and expand economic development and job opportunities in communities that are being left behind in the new knowledge-based economy. Recovery Act broadband projects help bring down the cost of private investment, attract Internet service providers to new areas, improve digital literacy among students and workers, and help create new opportunities in employment, education, and entrepreneurship by wiring homes and businesses. With new or increased broadband access, communities can compete on a level playing field to attract new businesses, schools can create distance learning opportunities, medical professionals can provide cost-efficient remote diagnoses and care, and business owners can expand the market for their products beyond their neighborhoods to better compete in the global economy.

Funding is contingent upon the recipient meeting the terms of the loan, grant or loan/grant agreement.  A complete list of projects receiving Recovery Act broadband grant awards today can be viewed in here

President Obama signed The American Recovery and Reinvestment Act of 2009 into law on February 17, 2009. It is designed to jumpstart the nation’s economy, create or save millions of jobs, and put a down payment on addressing long-neglected challenges so that the country can thrive in the 21st century. The Act includes measures to modernize our nation’s infrastructure, enhance energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need. 

Alert: Vilsack, Bernstein to Announce Broadband Stimulus Awards

Jared Bernstein 08/18/2010 San Francisco - Agriculture Secretary Tom Vilsack and Jared Bernstein, chief economist to Vice president Joe Biden, will hold a press conference today at 12 noon (EDT) to announce the next group of broadband stimulus projects.

Our information is that both the Department of Agriculture and the Department of Commerce will announce awards, potentially the largest single group of announcements under the program, today and tomorrow.

We will publish updates as we receive them.

Thursday, August 12, 2010

(Broadband) Peasants Plan Siege of (Silicon) Valley (Do No) Evil (Googleplex) Palace

Google's Alienation of Broadband Political Allies Echoes that of Obama Administration 08/12/2010 San Francisco - Oh the irony.

A collection of progressive, consumer, and tech policy groups typically aligned with the public stances of Google Inc. (GOOG) is planning an on-site protest of Google's  recently announced network neutrality initiative at the online firm's headquarters in Mountain View, CA.

With activists now mobilizing here in San Francisco and south through Silicon Valley, the groups including FreePress,, and others are planning to converge on the Googleplex at noontime tommorrow, August 13. 

Josh Levy, online campaign director at Free Press updated with the following links used in organizing the protest:

When: Tomorrow at noon (Friday, Aug. 13).
Where: Meet at the corner of Amphitheatre Parkway and Charleston Road in Mountain View, California.
Our Take: Google and Obama Administration Trash Activist Base 
Strategically the Google - Verizon net neutrality gambit is a policy and political blunder of the vaunted Google public policy shop managed by Richard Whitt.  The extent of Google's alienation of its key online activist constituency is exceeded only by that of the Obama Administration's recent trashing of the same base of progressive and tech groups.  It has been stunning to see FCC Chairman Julius Genochowski, in his secret meetings with net neutrality corporate "stakeholders," and press secretary Robert Gibbs with his twice told dumping on the "professional left," do such damage to the President's political base just two months before the critical 2010 election.  Somehow us Boston Democratic political types missed the apparent touchstone of our Chicago-based brethren: Bad mouth and punish your allies.

Tactically the FreePress - coalition has already put huge organizing points on the board by sending over 300,000 online signatures to Google on the issue in a matter of days.  If tomorrow's protest in Mountain View mobilizes a large number of bodies, it will mark one of the first times in which the flash mob / political subculture of the Bay Area successfully moves activists south into Silicon Valley for street level action effectively used by labor and other groups in San Francisco itself.    

Tuesday, August 10, 2010

Breaking News: House Cuts $302 Million in Broadband Stimulus Funds

Obama Rapidly Signs Bill Into Law
08/10/2010 Updated at 10:30 PM (EDT) San Francisco - The U.S. House has voted to cut $302 million in stimulus funds managed by the National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce.  President Obama signed the $26 billion state funding package which contained the cut into law late this afternoon.

The cut is part of the $26 billion emergency aid bill for states which was just voted through in the House chamber on Capitol Hill, passing by a 247 - 161 vote.  Speaker Nancy Pelosi had called her legislative body back into session last week, truncating the vacation period of Members, specifically to pass the funding bill.

President Obama signs H.R. 1586 into law. first reported passage of the funding measure in the House in a breaking news alert of 3:32 P.M. (EDT) today, followed with a full story by senior congressional reporter David Rogers 9 minutes later.  The online news service reports that Speaker Pelosi adjourned the House immediately following the vote on the bill, H.R. 1586 as amended by Senate action of last week. 

We had predicted last week, given the heavyweight sponsorship in the Senate of the consensus amendment that enabled final passage and the widespread distrust of the efficacy of the NTIA side of the broadband stimulus program, the $302 million cut was a good bet. 

Wasting no time to move federal funds to the states, at 5:15 PM (EDT) President Obama signed the legislation.  According to a brief written statement from the White House press office, the President signed the legislation "H.R. 1586, which appropriates funds for education jobs; extends and modifies certain increased Federal medical assistance for States; accelerates the sunset of certain temporary increases in food assistance benefits; limits the use of foreign tax credits by U.S. corporations with foreign operations; and rescinds appropriated funds for several Federal programs."  

The statement was accompanied by a longer blog posting by Domestic Policy Council Director Melody Barnes which focuses on the bill's role in avoiding teacher layoffs across the nation.

$302 Million Broadband Stimulus Cut on House Floor 08/10/2010 San Francisco – A $302 million funding cut to the broadband stimulus program approved by the Senate last week remains part of the $26 billion package of emergency funding for the states which the U.S. House is now debating. 

The bill’s primary purpose is to support recession impacted states with federal appropriations to keep public school teachers, firefighters, and police officers employed, and to extend the Recovery Act’s subsidies for the so-called FMAP (Federal Medical Assistance Percentage) state Medicaid payment program.

House Speaker Nancy Pelosi (D-CA-08) called the House back from vacation to convene in formal session today in order to win swift passage of the fiscal legislation which sponsors point to as being revenue neutral over the next 10 years.  Part of the way in which such zero impact on federal budgets will be achieved is found in the $302 cut to the Recovery Act’s broadband stimulus program, and in similar cuts (“rescissions”) to other stimulus appropriations.  Pelosi’s Democratic majority is expected to quickly pass the legislation today or tomorrow. 

As we reported last week, and despite some confusion about the bill’s proposed broadband cut by other congressional reporting services, the legislation designated as H.R. 1586  was amended to include the broadband cut on August 5th by a 61 – 39 Senate vote.  The House Rules Committee last night voted 8 - 3 in favor of floor procedures for today's House action, and published the first publicly available online version of the bill as amended by the Senate.

Senator Patty Murray (D-WA) was the lead sponsor in the Senate of the final compromise package, designated as Senate Amendment 4575 (summary), which won the filibuster-proof vote by 61 Senators to allow the bill back to the House.  In a telephone interview yesterday afternoon, Senator Murray’s press office confirmed for that the $302 million broadband program cut is contained in the bill now on the House floor. 

The $302 million cut is only to that part of the broadband stimulus program managed by the National Telecommunications and Information Administration (NTIA) of the Department of Commerce.  Although previous proposals, authored separately by Senator Max Baucus (D-MT) and Rep. Dave Obey (D-WI-07), had recommended a total cut of $602 million to the broadband stimulus funds jointly administered by NTIA and Rural Utilities Service (RUS) of the Department of Agriculture, only the cut to NTIA's Broadband Technology Opportunities Program (BTOP) was and carried back to the House.

Thursday, August 5, 2010

Alert: Senate Votes $302 Million Cut in Broadband Stimulus Funds 08/05/2010 San Francisco – In a 61 – 39 vote yesterday, the U.S. Senate voted in favor of a key amendment which seeks to cut $302 million from the remaining monies of the federal broadband stimulus program.  

We believe the cut, equal to approximately 10% of the estimated $3.05 billion in total funding for the program not awarded to date, most likely will be sustained by final votes in the Senate and House.
Sen. Patty Murray (D-WA)
The Murray-Harkin-Reid-Schumer Amendment 4575 to H.R. 1586 proposes to cut (engage in “rescission” in the parlance of Congress) “$302 million in recovery Act funding provided to the Department of Commerce for broadband grants”.  The legislative initiative leaves untouched monies in that part of the program administered by the U.S. Department of Agriculture (USDA).

With Senator Patty Murray (D-WA) as its lead sponsor, the amendment was successfully attached to a priority supplemental funding bill which seeks to help recession impacted states retain teachers on public payrolls, and extend stimulus funded payments for Medicare recipients.

As we reported on July 2, the powerful House Appropriations Committee had sent a similar proposal to the full House on July 1 which sought a $300 million cut from USDA broadband stimulus funds as well as the $302 million cut from Commerce Recovery Act funding.  At the time, we estimated the total of $602 million in proposed cuts equaled approximately 14% of the then unexpended monies from the full $7.2 billion for broadband appropriated under the American Recovery and Reinvestment Act of 2009 (ARRA). 

The proposal of the House was not sustained in eventual House – Senate action, although the $602 million figure had been initially suggested by Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee. 

Our Take: Proposed Cut to NTIA BTOP Program Likely to be Sustained
We believe the $302 million proposed cut is likely to become law quickly in view of several factors:

The cut is part of an emerging bipartisan effort to fund public teachers in recession impacted states in exchange for rescissions and other cost saving measures.

• Joining Sen. Murray as co-sponsors are senior senators Tom Harkin (D-IA), Chuck Schumer (D-NY), and Senate Majority Leader Harry Reid (D-NV) himself.

The larger $602 million cut has already been supported by House Appropriations Chairman Rep. David Obey (D-WI) and his colleagues.

Commerce’s broadband stimulus programs, administered by the National Telecommunications and Information Administration (NTIA), are seen by many on Capitol Hill and in the telecom sector as being poorly managed and unfocused relative to those of USDA’s Rural Utilities Service (RUS).  

Murray-Harkin-Reid-Schumer Amendment 4575 Summary to H R 1586
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